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The Affordable Care Act: Attainable Coverage for Small Businesses

Under the Affordable Care Act, small employers will have more options than ever when it comes to health insurance.

The Affordable Care Act: Attainable Coverage for Small Businesses

By SBA Region 7 Administrator Patricia Brown-Dixon

America’s 28 million small businesses are the backbone of our economy, creating two out of every three net new jobs and employing half of America’s workforce. From mom-and-pop stores and restaurants, to high-tech startups and productive manufacturers, 115,038 small businesses are helping to drive Missouri’s economy and create jobs in our local communities.
Many small business owners consider their employees to be part of their family, and providing benefits such as health care is one important tool they have to help retain their talented workforce and compete for skilled employees. But even though many businesses want to offer their workers health insurance, in the past they have often been unable to afford it, for reasons like steadily climbing rate increases and limited coverage.

The U.S. Small Business Administration (SBA) is committed to giving small business owners the resources they need to start and grow a business– including access to critical information about how the Affordable Care Act is opening up better health care options for small business owners and entrepreneurs.

Under the Affordable Care Act, small employers will have more options than ever when it comes to health insurance. As these provisions continue to go into effect in the next several years, it’s important for small business owners to stay informed about what they need to do to comply with and take advantage of the Affordable Care Act.

First, starting January 1st, 2014, small businesses with generally up to 50 full-time equivalent employees will be able to purchase health insurance through the online health insurance marketplace for small businesses, known as SHOP.

The SHOP Marketplace will offer employers a choice of qualified health plans from different private health insurers and make it easier for employers to make side-by-side comparisons between these plans, based on price and benefits.

SHOP also offers employers and their employees access to health insurance plans that must include a package of “Essential Health Benefits” like coverage for doctor visits, preventive care, hospitalization and prescriptions. Many small employers may be eligible for tax credits of up to 50% of their premium costs if they choose to purchase coverage through SHOP.

Enrollment in the federal SHOP marketplace, operated by the U.S. Department of Health and Human Services, starts on October 1st for coverage beginning January 1, 2014.Information on how the law affects your business, and instructions on how to preview the health insurance policy offerings in SHOP when they are ready on Oct. 1, are available via a new, streamlined web tool for businesses housed at Business.USA.gov/healthcare.

The Affordable Care Act calls on all employers that are covered by the Fair Labor Standards Act (generally, those firms that have at least one employee and at least $500,000 in annual dollar volume of business), to notify their employees about the coverage options available to them through the health care Marketplace, whether or not the employer currently offers health coverage. Employers are required to provide this notice to all current full-time and part-time employees by October 1, 2013, as well as all new employees at the time of hire beginning October 1st.

The Affordable Care Act allows small employers to offer health coverage in a way that makes sense for their business and works for their bottom line, and the SBA is committed to leveraging our resources and federal partnerships to connect you with the facts and resources you need to understand the law.